It’s no secret that divorce can be expensive. You’ll have to hire an experienced divorce attorney. You may need to establish your own residence and furnish it during your separation. You’ll need to figure out how to live on your own income, while possibly paying child support too.
If you and your spouse are heading to divorce, it can help reduce your stress to have a financial plan for the months ahead. Also, being financially prepared can help you ease the transition to life on your own.
So, here are five tips that can help you survive divorce financially:
- Fully understand your expenses, debts and assets. You’ll need to know what assets and debts will be divided during your divorce. You’ll also need to understand what expenses you’ll need to cover on your own. To do that, you’ll need to gather lots of financial information, including the following:
- Checking and saving account statements for the past year
- Current retirement account statements
- Current investment account statements
- Mortgage loan information and personal loan information
- Credit card statements
- Income tax returns for the past three years
- Recent income statements
- Establish a budget. You can work with your attorney to get a better idea of what your post-divorce budget may look like and start adjusting to that sooner rather than later. You can decide what assets you are more willing to let go and how your child custody agreement will impact any child support you may need to pay.
- Establish your own credit. It’s better to open a new credit card in your name alone before filing for divorce, as long as that won’t be considered a marital asset. Having your own credit history can help you as you later seek loans on your own.
- Seek a legal separation if your divorce becomes contentious. Emotions run high during a divorce, and spouses can sometimes start spending erratically. A legal separation formally can establish how you and your soon-to-be ex will spend money on joint expenses until your divorce is finalized.
- Don’t be afraid to downsize. If you first intend to keep the marital home, you may realize that it’s better to sell it and downsize to adjust to your post-divorce budget. Even if you wanted to stay in the home for the stability of your children, you shouldn’t keep the home if you really can’t afford it.
It may take a while to recover financially after your divorce. But by planning ahead, cutting expenses, living within a budget and even seeking a higher income, you’ll eventually find yourself reaching better financial stability.